Short Term Finance

For a company is crucial the availability of short term financing for its operation. The short-term financing consists on obligations that are expected to be fulfilled in less than a year and are required to sustain many of the current assets of the company, like cash, accounts to be cashed and inventories.

Where in previous sections we analyzed the cash budget and the pro forma financial statements we saw the needs of short term finance that a business could have and when we talk about management of Assets or Working Capital we made a distinction between this and the Net Working Capital because the working capital management also is part of all the liabilities relating to this section, since it will place special emphasis on these to show what an efficient financial management and a proper use of sources of short term finance represents for a company.

Consequently with the previously discussed issues here this is what we have performed when following the specifics objectives:

• Analyze the sources of existing short-term financing.

• Submit factoring as an alternative source of financing for the company.

The short term finance is a debt that generally are scheduled to be repaid within a year since it's generally better to borrow on an unsecured basis, as the cost of accounting for loan guarantees are often high but in turn represent a support while recovering